Energy Sanctions and Russia: What Comes Next?

The West has responded to the Kremlin's increasingly bellicose policy in the former Soviet space by imposing punitive measures against Russia's energy sector. The immediate impact of such measures appears limited as neither oil nor gas flowing from Russia is expected to suffer right away. However, the sanctions' long-term implications may prove more important. In "Energy Sanctions and Russia: What Comes Next?," Adnan Vatansever, a Nonresident Fellow at the Atlantic Council's Dinu Patriciu Eurasia Center and a Global Energy Center Fellow, argues that the sanctions could diminish Russia's capacity to produce the same amount of oil and hamper a number of its gas objectives abroad.

Punitive measures against the Russian oil sector have come at a time when the indus¬try is facing growing urgency for collaboration with US and European companies. Developing a new generation of Russian oil fields hinges on these partnerships to a much greater extent than in the recent past. For the Rus¬sian gas sector, on the other hand, the main challenge appears to be a lack of markets. Sanctions could further magnify this challenge by hampering Russia's liquefied natural gas growth plans and fostering the EU's drive to diversify its gas imports.

The United States and the European Union retain a set of policy options that could further constrain the energy sector's role as the power base for the Russian economy with potential implication for the Kremlin's foreign posture.